IBM will be confronted at its shareholders meeting on Tuesday by employees calling for assurances that Big Blue will exclude pension fund income from the calculation of executive bonuses and other performance-based compensation, the Communications Workers of America Local 1701, Alliance@IBM union said Monday.
Union members and employees plan to hold a rally outside the IBM shareholders' meeting in the Kentucky International Convention Center, in Louisville, Kentucky, on Tuesday morning, the union said in a statement. Union members and employees are also protesting company job cuts, the union said.
Representatives in IBM's U.K. offices were unable to comment.
IBM is scheduled to discuss pay packages for its executives at the shareholders' meeting, according to documents the company filed with the U.S. Securities and Exchange Commission (SEC) on March 11.
In 2001, IBM's Chief Executive Officer (CEO) Louis Gerstner was paid US$10.08 million in salary and bonuses, while Chief Financial Officer John Joyce was paid $1.2 million for his annual salary and bonuses, according to the SEC filing. In separate long-term awards and payouts in 2001, Gerstner was granted $2.5 million, while Joyce received $834,043 in "securities underlying options, LTIP (long term incentive program) payouts" and other compensation, IBM said.
On March 1, Samuel Palmisano succeeded Gerstner as IBM's CEO, promoted from his previous role as President and Chief Operating Officer. In 2001, Palmisano received $4.18 million in salary, bonus and other annual compensation along with $2.3 million in securities underlying options, LTIP payouts and other compensation, IBM said.
Earlier this month, IBM released a first-quarter financial report that it deemed "disappointing," due to its product lines' revenue declining across the board, and its hardware offerings showing the biggest falls. For the first quarter of 2002, which ended March 31, IBM reported net income of $1.19 billion and revenue of $18.6 billion.
According to the union, IBM's pension plan last year produced $904 million in income, or 13.2 percent of overall company pretax earnings. The union wants assurances from IBM that earnings from the pension fund will not be used to "artificially inflate profits and boost the compensation of top executives," the union said.